If you believe the headlines, now does not seem the most obvious time to be investing in property: the market in the UK, as in much of the rest of the world, is slowing, if not actually falling yields almost everywhere are under pressure and the sub-prime crisis has put an end to the days of super-cheap borrowing.

Try telling that to Eric Potts. Since he picked up his first buy-to-let in London’s Docklands in 2002, Potts, 45, has amassed a portfolio of 41 properties, initially in Britain and then abroad, valued at well over £8m — and he’s considering adding a 42nd, a church near his home in Chichester, West Sussex.

“I am still buying, but I am a bit more selective,” says Potts, who has funded most of his purchases — ranging from Latvia to Turkey, Brazil, northern Cyprus and Bulgaria, from the sale of Jobsite.co.uk, a website he helped to set up in 1995 with members of his family. “There is always money in property,” he says. “You just have to feel in your stomach that it’s a good deal.

“My fiancée keeps a spreadsheet showing how many properties I have and what their status is. It’s very reassuring every couple of weeks to take a look at it. It makes you feel good and you sleep well.”

Potts’s portfolio — bought largely through Spanish-based Obelisk International — is considerably larger than that of the average property investor. But his journey from Britain and then on to the emerging markets of central and eastern Europe and beyond is a familiar one.

Since the introduction of specialist buy-to-let mortgages by British lenders in the mid-1990s, hundreds of thousands of investors have turned to bricks and mortar as an apparently safe and easily understandable alternative to pensions or other financial investments.

According to the Association of Rental Letting Agents, the buy-to-let market in the UK is now worth at least £150 billion. Investors have also become far more adventurous as the market in much of the UK slowed in 2003 and 2004, many looked abroad in search of the capital gains and yields no longer achievable at home.

Yet even on the most optimistic predictions, property prices in Britain will struggle to end this year much above current levels — most forecasters are looking for a rise of 2%-3%, which would mean a decline in inflation- adjusted terms. Fionnuala Earley, chief economist of Nationwide, Britain’s largest mortgage lender, believes prices will not be rising at all by this time next year.

Nor is the picture much better overseas, with a distinct slowing in France, severe problems of oversupply on the Costas and other areas of Spain popular with British buyers and some price falls in parts of the former communist world.

So is it still possible to make a profit from property and, if so, where? According to Liam Bailey, head of research at estate agents Knight Frank, it is all about doing your homework. “It’s very hard to find easy money in the market in the UK or, increasingly, in Europe these days,” he says. “You’ve got to search areas that will outperform the average, since the average won’t be good enough for most investors. more...